Moody’s said the new rating, which applies to about $14.6 billion in debt, is based on the state’s high fixed costs for pensions and service debt, which reflect about a fifth of total state spending. The ratings firm said Connecticut’s depleted cash reserves have little prospects for near-term replenishment and cited pension funding that is among the lowest in the country.

Moody’s now rates Connecticut debt at Aa3 — three notches below the highest possible credit-quality rating — and revised the outlook to stable from negative.

State officials said Moody’s claims were flat out wrong and called into question the credibility of the ratings firm.

“Connecticut has done all the right things to shore up our finances, and Moody’s has responded with a downgrade intended to satisfy their internal corporate need to deflect attention from their historic lack of credibility,” said Ben Barnes, the state’s budget chief. Read More »

The annualized net interest cost of the issue was 0.2564%, ranking it “among the lowest rates we’ve ever paid” on such a note deal, Pratt said. “The New Jersey Treasury is pleased that taxpayers will get this low cost money to meet government cash flow needs.” Read More »

The benefit cuts, which included increasing the retirement age for future hires and requiring current workers to pay more for both pensions and health care, saved the state about $5 billion on future pension payments and $2.5 billion in future health care payments, according to a report released Friday by the state Treasury.

“We have dramatically decreased the pace of borrowing in the state,” said Andy Pratt, treasury department spokesman. Read More »

New Jersey, one of the most indebted states in the country, saw its debt grow by $1.3 billion last year to $32.8 billion — not including billions more owed for unemployment benefits, public-worker pensions and health care.

Road repairs and school construction drove most of the increase, which was detailed in a New Jersey Treasury report to be presented Friday to a state commission. The report shows borrowing through June 30 and does not include the current state budget, which would add to the total debt picture.

New Jersey’s reliance on borrowing has squeezed the state budget, forcing cuts in education spending, property tax offsets and state services. That, coupled with the state’s long-term pension and benefit promises, could make it more expensive for the state to continue borrowing. In September, Moody’s Investors Service signaled the state could face a ratings downgrade. Read More »